SANTA ANA, California – The owner and chief executive officer of an Orange
County rehabilitation facility has been arraigned in federal court on charges related to a
scheme in which he allegedly submitted nearly $1 million in fraudulent claims to
Medicare for services that were not prescribed by treating doctors and were not
medically necessary.

Tuan Duc Tran, 50, of Westminster, appeared yesterday in United States District
Court and pleaded not guilty to charges contained in a nine-count indictment. Tran was
arraigned after surrendering to federal authorities.

Tran operated the Fountain Valley Healthcare Center (FVHC). From May 2003
through January 2008, Tran allegedly sought payments from Medicare based on false
claims that Medicare beneficiaries had been referred to FVHC for physical and
respiratory therapy by their treating doctors. The indictment also alleges that many of
the beneficiaries did not have a medical need for therapy and that Tran employed
unlicensed personnel at FVHC.

Tran is charged with nine counts of mail fraud based on a total of $910,588 in
checks that were sent to FVHC between March 2006 and January 2008. A federal
grand jury returned the indictment in late March.

At yesterday’s arraignment, Tran’s case was assigned to United States District
Judge Josephine Staton Tucker, who scheduled a trial for July 5. During yesterday’s
hearing, Tran was freed on a $10,000 bond.

An indictment contains allegations that a defendant has committed a crime.Every defendant is presumed innocent until and unless proven guilty beyond areasonable doubt.

Each of the nine mail fraud charges in the indictment carries a maximum
statutory sentence of 20 years in federal prison.

The case against Tran was investigated by the Federal Bureau of Investigation,
the Department of Health and Human Services – Office of Inspector General, and IRSCriminal Investigation.